Hyflux is expecting the axing of a previous settlement agreement with Mitsubishi Heavy Industries (MHI) to result in an “overall material adverse financial impact to its financial performance”, the water treatment firm has announced as quoted by the Business Times.

According to a previous report by BT, Hyflux has signed a new agreement in relation to its TuasOne waste-to-energy project, which novated the engineering, procurement and construction (EPC) contract to MHI.

The termination of the settlement agreement would discharge certain liabilities, the novation of the EPC contract and the division of the remaining payments are expected to result in the group giving up certain rights to some proceeds from the construction revenue, Hyflux said quoted by BT.

However, the new agreement would resolve uncertainties and “create a more stable condition” for the group’s ongoing debt restructuring exercise, it added.